Mastertrusts take return out of risk and return

Monday 27 September 2004

If we are to believe the marketing brochures, financial markets today are far too complex to "do it yourself". Better to delegate the job of reading those investment statements to a stockbroker or financial planner.

By The Landlord

The administration of these investments is also increasing in importance and cost.

Many advisers employ a third party, most commonly their favourite fund manager, to undertake the overall management of each of their client's accounts via a mastertrust structure.

A mastertrust is a computer-based platform that permits investors access to a range of fund managers and unit trusts through one investment door. Many of New Zealand's largest financial planning firms base their business around a mastertrust structure. Although mastertrusts are promoted as making the administration of their investments cheaper and simpler for clients, a closer look at these products suggest their fee structures are prohibitive and what benefits there are accrue principally to the adviser.

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